Special Planning Considerations for Alzheimer’s and Dementia

September 14, 2022 No Comments

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Building wealth is only half the job. Protecting wealth for your loved ones and yourself is equally important. Through estate planning, business planning, and asset protection, our firm will help you protect everything you love — family, friends, and favorite charities. For more information, be sure to visit our website, where you will have access to our blog, events schedule, and a complimentary newsletter subscription!

Special Planning Considerations for Alzheimer’s and Dementia

If you receive an Alzheimer’s or dementia diagnosis, planning for the future must begin as soon as possible.

Preparing for incapacity must be done while you still have legal capacity: the ability to express your own wishes and understand the implications of documents that are created to enforce and protect them. Once you become incapacitated, you may not sign legal documents. In the absence of proper incapacity legal planning in advance, a court process will then be required to appoint financial and health care decision-makers for you. This process can be lengthy and expensive. It also will expose your private personal, health, and financial circumstances to the public record.

What Documents are Needed for a Person with Dementia?

Through a general durable power of attorney (POA), you can appoint a trusted individual as the agent (also known as the attorney-in-fact) to manage your financial and legal matters. While a POA can give limited powers, in cases of Alzheimer’s or dementia, broader powers should be given to the agent. Why? Your appointed will most likely need such authority to conduct all and any financial and legal matters on your behalf. A complete list of all assets, including bank accounts, pension, retirement plans, investment accounts, real property, and digital assets, should be created and provided to the agent appointed under your POA.

If you have executed a last will and testament, it should be reviewed and probably updated without delay. Make sure that it still reflects your wishes, especially regarding the executor you have appointed and the distributions you want to be made to your beneficiaries. If you have any minor children, you should also make sure that the guardians you have nominated are still willing to serve.

When one spouse has a diagnosis of oncoming cognitive impairment, some difficult decisions should be considered with an estate planning lawyer, such as shifting some assets to a Medicaid Asset Protection Trust, or transferring assets to children or the healthy spouse, with some trusts created in the healthy spouse’s will to protect some asset if the caretaking spouse dies and the disabled spouse’s needs to be cared for in a nursing home. If more than five years at home is likely, some proactive planning can greatly increase the options available for caring with greater flexibility. If a crisis is at hand, more drastic planning can preserve some assets for care once the state takes over payments.

This is now an instance where a trust created in a will can have significant advantages over the assets being held in a revocable trust, even if probate is required. Which planning options make sense depends greatly on how much time is anticipated before nursing care is required.

What Healthcare-Focused Documents Should Be Prepared?

While executing your POA, remember to execute a healthcare power of attorney as the agent. This document is also known as an advanced directive or health care proxy in some states. The individual who you appoint as the agent will be authorized to make your fundamental health care decisions if you are incapacitated. The same individual is sometimes appointed to serve as an agent for financial and health care decisions. However, this is not always the case. Each situation is different. You know the pool of candidates’ strengths (and weaknesses) for these important roles.

A living will, also known as an advance health care directive, documents your wishes regarding end-of-life care. It must address some hard questions concerning medical treatment: do you want your life extended through artificial means? Would you want to donate your brain or other organs for scientific research?

You should execute a HIPAA release form, so doctors and attorneys may speak with your financial and health care agents, family members, and caregivers as issues arise. In addition, those you authorize will also be able to access your medical records. This access is essential and is very practical for uses ranging from obtaining second opinions to pursuing potential malpractice claims. The HIPPA release form is also needed to interface with the health insurance provider. The right to speak with medical providers based on being a spouse or descendant should not be assumed.

Trusts are Commonly Used to Manage Assets for Incapacity Planning

You can create a fully-funded revocable living trust to address the management of your assets while you are living and to distribute your assets postmortem according to your instructions. As long as you have the capacity, you are in charge as the original trust and beneficiary. You can even make any changes you desire. Upon your incapacity, the trust becomes irrevocable and continues to provide for you. Your trust becomes irrevocable upon death since it carries out your distribution instructions. The successor trustee you appoint can be the same person appointed as the agent under your POA, the executor under your last will, and even your health care agent.

Planning for Final Arrangements

It is wise to discuss whether you want to be buried or cremated. You should also provide guidance regarding what, if any, kind of funeral service you would like and any other related arrangements. The more decisions you can make now, the fewer your loved ones will need to decide later on when grieving your loss.

Incapacity Planning for Alzheimer’s or Dementia

Planning for incapacity can be part of coming to terms with an Alzheimer’s or dementia diagnosis for you and your loved ones. Memorializing your wishes helps keep you in control of the process since your wishes are expressed and documented. You and your loved ones will be empowered to move forward with a plan in place.

The sooner you seek professional help, the better the planning choices that you will have.

Upcoming Webinar September 27 at 6:00 PM

We have a basic estate planning webinar on September 27 at 6:00 pm. Please join us if you want a refresher on your own planning, and want to introduce your family to what you have done. Also, if you want to give a friend a chance to find out about their options for planning, please pass this newsletter on.

To register for the seminar, please click here.

Estate Planning Hazards

August 9, 2022 No Comments

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Building wealth is only half the job. Protecting wealth for your loved ones and yourself is equally important. Through estate planning, business planning, and asset protection, our firm will help you protect everyone you love — family, friends, and favorite charities. For more information, be sure to visit our website, where you will have access to our blog, events schedule, and a complimentary newsletter subscription!

Estate Planning Hazards

Figuratively speaking, life is chock full of road hazards. If we know where they are, then we can avoid them. It is the unknown hazards that are the problem. Just like when traveling on an unfamiliar road, it is best to learn from the experiences of those who have been down that road before. For example, if that automobile in front of you swerves to miss a crater in the street, then you may want to do the same. So it is with your estate plan. We can learn a lot from the failures and near misses of others. In that spirit, consider two familiar sources of dangerous estate planning hazards: beneficiary designations and joint tenancy ownership.

Beneficiary Designations

Depending on the state in which you live, virtually any titled asset may pass directly upon death simply by adding a beneficiary designation. Likely, many of your assets will pass by a beneficiary designation, including life insurance, annuities, and retirement funds. In addition, the non-probate transfer laws of many states provide for “pay on death” or “transfer on death” designations that work in much the same manner. Consequently, you may even designate beneficiaries for bank accounts, CDs, stocks, and other assets. Some states provide for the transfer of real estate through a special transfer on death deed.

Arranging for transferring your assets at death by beneficiary designations is attractive for several reasons, including its simplicity and the fact that little to no attorney work is required. While all of this looks smooth on the surface, beneficiary designations can become severe hazards regarding your estate planning objectives.

Beneficiary Designation Hazards

For example, did you know that any assets designated to pass directly to your beneficiaries are not subject to the terms of your estate planning legal documents like your will or trust? Consequently, you may be disinheriting some of your heirs in whole or part. In addition, any asset protection or special needs planning you created in your will or trust may not take effect as intended. Keeping your beneficiary designations current is vital to the success of your estate plan. You cannot simply take a “set it and forget it” approach.

Joint Tenancy Ownership

If you own any assets jointly with others, then you are in good company. Joint tenancy is one of the most common forms of asset ownership. If you own a bank account, brokerage account, or perhaps real estate with one or more persons, then chances are pretty good that you and they may be joint tenants. The full legal expression for this form of ownership is joint tenants with rights of survivorship (JTWROS).

Although JTWROS is most often found on the title to assets owned by married couples in common law states, residents of community property states also should understand JTWROS given the mobile nature of our society. In some states, a particular form of joint ownership called tenancy by the entirety is available to assets held solely between spouses. There are unique “asset protection” aspects to tenancy by the entirety ownership that can be very beneficial.

When one or more persons hold title to an asset as joint tenants, each owns the asset. In most cases, if one joint tenant becomes incapacitated, then the other joint tenant may continue to fully control their JTWROS assets without interference because of their concurrent ownership rights. When one joint tenant dies, the remaining joint tenants continue to own the asset without the need for probate. Ultimately, the sole surviving joint tenant owns the entire investment. This “right of survivorship” is one of the attractive legal features of JTWROS.

Not surprisingly, many JTWROS relationships are between family members. It just seems like the natural thing to do and, especially between spouses in a long-term marriage, reflects their commitment’s financial partnership.

For this reason, many widows, widowers, and other single adults may add trusted family members or friends as JTWROS to their assets. Nevertheless, as with most things in life, there are hidden hazards regarding this form of asset ownership.

Joint Ownership Hazards

While it is true that JTWROS may avoid probate at death, this is true only if at least one living joint tenant is not also incapacitated. To ensure this, however, most people add non-spouses as joint tenants.

Whether it is children, siblings, or friends, resist the temptation! Once you add a joint tenant to a given asset, they also own the given asset just as you do. What you may have intended merely as a convenience has instead subjected the control, use, and enjoyment of such asset to the potential liabilities of each joint tenant. These liabilities may come in many forms through your joint tenant, including divorces, lawsuits, or creditors.

Your intentions for the eventual distribution of your assets may be frustrated due to JTWROS ownership. For example, your will or trust may not control assets held in JTWROS. Often, assets passing to a surviving spouse later end up in JTWROS with a new spouse. That new spouse (and stepchildren) ultimately may receive assets from the previous marriage instead of the children you intended to protect. Considering the disinheritance risks in every blended family situation would be best.

Easy May Not Be Better

As with any decisions affecting beneficiary designations and asset titling, consult with an experienced estate planning attorney. Otherwise, you may fall victim to some highly unpleasant legal hazards.

To Learn More

Upcoming Seminars

We are having basic estate planning seminars. If you want a refresher on your own planning, want to introduce your family to what you have done, or want to give a friend a chance to find out about their options for planning, please pass this on.

To find out more about the seminar, please click here.

THESE SEMINARS ARE AT OUR OFFICE NEXT TO THE POST OFFICE ON MAIN STREET

Tuesday, August 16, 1:00 PM-2:30 PM

Wednesday, September 14, 2:30 PM-4:00 PM

Seating is limited, so call at 301-776-7900, or go to the events tab on our website to reserve your seat

Light refreshments will be served. We hope you can make it to one.

We are also holding the program as a Webinar on September 27 at 6:00. Visit the website for details

DIY Estate Planning Pitfalls

July 13, 2022 No Comments

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DIY Estate Planning

Being economically prudent can be a virtue. There is certainly wisdom in having a budget and weighing the cost-benefit of every purchase before parting with your hard-earned cash. However, pinching pennies can backfire and cost you more in the long run. Sometimes, hiring a professional is the best choice.

Unless you are a certified electrician, wiring your house could send your dream home up in smoke as you stand powerless to fix your faulty work. Do-it-yourself estate planning presents a similar risk. Without a thorough understanding of state and federal laws governing taxes and asset transfers, you could endanger your estate and loved ones with the plan you created.

Estate planning mistakes are easier to make than you might think. Consider these eight basic DIY estate planning pitfalls.

Not using available tax-effective transfer strategies.

Lifetime giving and estate planning provides means for transferring assets to loved ones. However, both of these can trigger taxes when done without the knowledge of current laws. The estate tax exemption threshold has seen significant changes throughout the years. Only estates with total assets exceeding $12.06 million for an individual and $24.12 million for a married couple are subject to federal estate taxes. Certain states also impose their state estate taxes and have their own rules regarding exemptions. Lifetime giving can serve the dual purpose of transferring assets while reducing your taxable estate. However, there is an annual limit on how much you can give a person without triggering a gift tax. At present, that amount is $16,000. Going over this amount when making lifetime gifts will reduce your federal estate exemption at death. Filling out the appropriate tax forms and acting under current tax law is vital to tax-efficient planning.

Not reviewing and updating estate planning documents.

Creating a will and trust is the start of a good estate plan. An effective estate plan is designed to satisfy your current needs and the relevant laws. However, laws and family circumstances change over time. If your estate plan does not change with legal and family changes, then your estate plan could undermine your own goals. To avoid leaving a mess for your loved ones, review your estate plan every few years and make the appropriate changes.

Using a “one size fits all” plan.

You can find generic wills, trusts, and other estate planning documents online. These documents may seem like a fairly simple solution to creating an estate plan. Unfortunately, like deceptive clothing labels, “one size fits all” estate plans cannot meet the needs of every individual. If you have minor children or a shady son-in-law, you may need more advanced legal planning to protect the inheritance for and from your financially immature heirs. While a simple will may work for someone else, your family might require the probate avoidance privacy of a funded revocable living trust with inheritance protection. A penny of prevention is worth a pound of cure!

Selecting the wrong executor or trustee.

The roles of executor and trustee carry considerable responsibility. We spend time on client meeting exploring the candidates. Not everyone is capable of filling these roles. The person you select should be someone who is mature, organized, and will likely outlive you. If the dead could execute estates or administer trusts, there would be no need for you to name someone other than yourself. An experienced estate planning attorney can help you evaluate your options.

Not funding your trust.

A revocable living trust can be an effective estate planning tool. It allows you to distribute assets to your heirs while bypassing lengthy and public probate proceedings. A trust gives you greater control over the management of these assets and how thy are to be used to benefit your successors. However, the trust can only control and distribute assets when it has title to the assets. You will need to “fund” your trust. However, not all assets need to be titled to your trust. Certain assets transfer through their own beneficiary designations. In fact, placing certain assets in your trust could have negative consequences. There is more to “funding” a revocable living trust than any DIY estate planning website can properly advise.

Overlooking witness qualification.

Estate plans are not legally binding simply because you typed out your wishes and printed them from your computer. For a court, bank, or hospital to accept your documents, the documents must be “legally” executed with all the required formalities. For example, the requirements for a valid last will and testament vary from state to state, especially regarding witnesses and notaries. If your DIY estate plan is not “technically” legal, then it is not legal. The good news? When the estate plan fails to work, you will not know it. You will be dead. The bad news? The loved ones you leave behind will be left with your estate mess to clean up. Is this how you want to be remembered?

Lack of Assistance when it is needed most

The quality of the estate plan you put in place is tested when it is needed: When you are incapable of helping tg guide and protect your loved ones. At death or disability, how well will your planning be implemented? What needs to be done at these stressful times is where the rubber meets that road.

These mistakes are easy to make if you do not work with an experienced estate planning attorney. Spending money to work with a professional in any field is a small price to pay for peace of mind.

Upcoming Seminars

To find out more about the seminar, please click here.

THESE SEMINARS ARE AT OUR OFFICE NEXT TO THE POST OFFICE ON MAIN STREET

Tuesday, July 19 10:00 AM-11:30 AM

Thursday, July 21 10:00 AM-11:30 AM

Wednesday, August 3 2:30 PM-4:30 PM

Tuesday, August 16 1:00 PM-2:30 PM

Seating is limited, so call at 301-776-7900, or go to the events tab on our website to reserve your seat

Light refreshments will be served. We hope you can make it to one.

Happy Father’s Day

June 15, 2022 No Comments

Happy Father’s Day

I lost my Father in October, suddenly and unexpectedly. John F. Downs Jr. was 91 but still had impressive energy, zest for life, and a strong desire to be with and care for his loved ones, especially his wife of 69 years, my mother, Dee. Sunday will be our first Father’s Day without him. I often see on Facebook frequent tributes for deceased mothers or fathers and am at a loss for what to say to acknowledge the loss and void involved. Now I understand a bit more of the ache of grief. It was a great blessing to our family to Dad for so long. It is a gift granted to me that a few of my friends or clients.

In the ordinary shuffle of the day-to-day busyness, I have a kaleidoscope of impressions and sensations just getting from morning to night and have taken precious little time to mourn and appreciate Dad for all he meant to me.

My seven siblings and I, as well as Mom, all deal with the impact of Dad being gone differently. I have had the duties of estate management and coordination of benefits. In working with many people serving as executors or trustees, Grieving can be delayed or buried altogether with the distractions afforded by having multiple tasks one needs to pay attention to manage the affairs of the person we have lost.

Happy Father’s Day, Dad. Thanks for the love, support, and encouragement you always have given me. I strive to do the same for my kids.

If you have lost your Dad, take some time Sunday to appreciate and regret a few things said and not over a lifetime.

I know some people have a biological father who never rose to be active in their lives. If that is your case, there may be another man, be it stepfather, uncle, or brother, who was effectively your Father.

If you still have your Father, take a moment to reach out and tell him one thing you appreciate that he did for you that he would have forgotten. It will make his day. He has made many of yours.

Here are some gratitude from our team to Fathers, both living and deceased:

Thank you for being my hero in every conceivable way! -Patty Perez

Thank you for teaching me to appreciate the beauty of nature.- Sheree Tiller

Dad, thank you for letting me work with you in the summers during college, and for modeling St. Joseph the Worker for me.- Justin Wedgewood

For teaching me to “Dance.”- Jackie LeCompte

Thank you, Dad, for being a very kind and understanding man. One summer, he taught us kids geometry in our kitchen so we could

skip a whole class in high school. He was a good teacher!- Wendy Krehbiel

Thank you for your sense of humor, for passing on your faith, for teaching us important life skills, and for making fun a priority.- Daina Bowen

Dad, thank you for leading our family and honoring Mom in our daily life.- Stephen Wallace

Thank you, Dad, for always being willing to play ball with us after you got home from work.- Tom Downs

Best wishes.

Summer Is Upon Us

A new season. Don’t they change now so quickly?

I know I’m old because I already long for the end of summer. Chalk it up to global warming, but heat doesn’t give me the thrill it once did. Have I become the old man next door who will keep the ball if it comes into my yard? Yep.

My sister Teresa has a retreat in West Virginia called “Three Otters.” It is a magical place to visit because, while only two and a half hours from Laurel, it lacks the internet. No cell phone signal. You can take the kids there and then will enjoy a game of cards after a day or so.

When my Father died in October, we held Dad’s Covid-safe celebration of life there. There is enough open space to entertain 60+ people with plenty of social distancing. It was fitting because it was a place my parents loved and supported enthusiastically.

When my mother-in-law died in March, I told my Grandson that we were going to a funeral for her. He said excitedly, “Are we going to Three Otters?”

What a significant, if short-lived, association of a funeral with the river and campfires. I wish it would always be so.

Upcoming Events

We will have seminars to educate people about Estate Planning in July and August. This is a good basic overview of the choice you have in putting your affairs in order, wherever you are in your life’s journey. Also, inviting someone to a seminar is a great way to nudge a loved one to get their own will or trust completed. After attending a seminar, it may well be their idea that doing so makes sense. If you are interested or know someone who might be, the scheduled seminars will be at our office, in our seminar room.

Tuesday, July 19 at 10:00 AM or

Thursday, July 21, at 10:00 AM or

August 3, at 3:00 PM.

Seating is limited, so call for reservations. We will serve light refreshments.

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Sweetheart Wills

May 10, 2022 No Comments

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Building wealth is only half the job. Protecting wealth for your loved ones and yourself is equally important. Our firm will help you save everything you love — family, friends, and favorite charities through estate planning, business planning, and asset protection. For more information, be sure to visit our website, where you will have access to our blog, events schedule, and a complimentary newsletter subscription!

Sweetheart Wills

Nothing says “I love you” quite like a last will and testament (will). And, if you get right down to it, nothing says it better than “sweetheart wills” between married spouses. Let’s look at this traditional estate planning tool, its uses, and at least one pitfall to avoid.

Provide for Your Spouse

Most married couples want to honor their wedding vows to care for one another, whether richer or poorer, until death they do part. Consequently, sweetheart wills are so named because they reflect this desire by designating the surviving spouse as the direct inheritor of everything owned separately or jointly. Commonly, both spouses have “mirror-image” provisions in their wills to ensure that virtually everything passes to the surviving spouse.

Make Specific Distributions

On the other hand, spouses may wish to provide distributions that are not outright to the surviving spouse but are intended to pass instead to other loved ones or charities. For example, your spouse may have little interest in the ceramic bullfrog collection your beloved Aunt Vivian left to you at her estate. Fortunately, you may specifically designate that cherished collection to your cousin Vinnie, who was also a favorite of Aunt Vivian.

Appoint Guardians for Minor Children

In some states, a will is the primary legal tool used to appoint guardians (backup parents) for orphaned minor children. Even if your state provides other means to make this critical appointment, this is good information to know if you move to such a state. When selecting a guardian, always choose a successor or two because the primary guardian you appoint may be unwilling or unable at the time of need. Also, select candidates who share your fundamental beliefs and values, not to mention who adore your minor children. Finally, speak with them and make sure they are willing to take on parenting your children before they are named in your will.

Disinherit Your Own Children

One of the biggest risks and unintended consequences of sweetheart wills is found in the context of blended families. If you have remarried after being widowed or divorced and have children from that prior marriage, then watch out! Without careful planning, you will disinherit your own children if you leave everything to your new spouse. You’ll need to make provisions to leave assets to your children. That can be done by naming them as beneficiaries on certain accounts. Work this out when you are creating your estate plan.

Send Your Estate to Probate

Many people mistakenly believe that a valid will avoids probate if they become incapacitated or die. Nothing could be further from the truth. A will cannot appoint anyone to handle your financial matters or make your medical decisions if you are legally incapacitated because a will only has legal authority upon your death and the subsequent delivery of your original will to the probate court within the timeframe required by statute.

Depending on your state of residence at the time of your death, some commonly cited drawbacks to probate are the time and red tape involved (after all, it requires the involvement of an attorney and a probate judge), the additional expenses, and the public nature of the process (anyone can get a copy of your will and the inventory of your assets). If these potential drawbacks are something you would prefer to avoid, then you may wish to consider alternatives to probate.

Summary

Before you make any legal moves regarding your estate, make sure you contact an experienced estate planning attorney to fully educate you on your options.

Choosing and Preparing Guardians

April 12, 2022 No Comments

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Building wealth is only half the job. Protecting wealth for your loved ones and yourself is equally important. Our firm will help you be a good steward for those you love — family, friends, and favorite charities through estate planning, business planning, and asset protection. For more information, visit our website, where you will have access to our blog, events schedule, and a complimentary newsletter subscription!

Choosing and Preparing Guardians

It may be the most dreaded thing for parents to contemplate. Who would raise their children if both parents died?

The most important piece of advice: if you do not have a last will nominating a guardian for your minor children, get it done immediately. The court will decide who will raise your children if you fail to make that decision in a will. Family members are not always selected, and the children find themselves in foster care if a custody battle between family members erupts.

Who is Best Suited to be Guardian?

A knee-jerk reaction is to name grandparents. However, do the math, and you may find that decision is usually not realistic. Will they be able to care for active young children or handle the many challenges of caring for adolescent children? We have three grandchildren who we love unconditionally. When they are teens, we will be in our late 70s. Having raised our teenage children, I know it is a time that demands significant attention and vigilance.

Good candidates are often siblings or close friends who are parents with shared values. I am from a family with eight children, and Margie is one of ten children. We had lots of potential candidates and, for years, stalled on signing wills because it was a topic that led to difficult conversations. We finally figured out that, although we could quickly agree on who would be guardian, we could easily agree on who not to name. That left with a narrower pool of choices and highlights the danger of not signing a will: if you fail to make a decision that is binding in your will, a person you would not select could easily end up as the choice.

It would be ideal to have the children remain in familiar surroundings. However, if this is impossible, then a loving home with adults who can provide stability and support is better than a second choice in your hometown. As children age, the geographic proximity also may cause you to reconsider your guardian choice. Children become less portable as they age: moving a child to a different area is much more difficult in high school than while in grade school.

Have a successor guardian and a third alternate successor nominated in your last will. Health or other circumstances could arise, preventing your first choice from being able to serve. If your first choice is unwilling or unable to perform, having a second and third choice avoids having the court decide.

The Guardian and the Trustee

A guardian provides custodial care. The trustee oversees the inheritance of your minor children. One person (or a couple) can serve in both roles in some cases. However, this is not always the case. Someone might be great with kids and bad with money. If you separate the functions, consider whether they can work together.

What are the Trustee Responsibilities?

A trustee needs to put the needs of beneficiaries above their own. Parents who own their homes and have one or more life insurance policies require a fiduciary who can manage several hundred thousand or even a million dollars for two or three decades, depending on the age of the children.

If you have more than one child, we design the trust to serve them as a pooled, or “Common Pot” trust, so their various needs can be met. Our three children are four years apart. By the time our youngest son started college, our older two had graduated. It would not be fair to divide the asset into thirds because he would have had to pay for college himself had we died then. Instead, with a common pot, all the funds are held until the youngest achieves what you want to define as adulthood.

When does a child get uncontrolled use of the inheritance? The older I get, the older I think it should be.

While children are legally permitted to inherit wealth when they come of age, few 18-year-olds are ready. Because many newly minted young adults do not have the financial experience and maturity to inherit in a single lump sum, trusts are often created to control the inheritance until they are old enough to manage a significant amount of money. Some parents choose to stagger the distribution of the distribution in fractional shares upon attaining certain ages. For example, they may have one-third distributed at age 25, then one-half at age 30, and the balance at age 35. In addition, trusts can also include “incentives” to encourage positive behaviors, like graduation from vocational training or college.

What Happens to the Family Home?

If the plan is to have guardians live in the family home with the minor children, the house could be held in trust for the benefit of the children. Will it be sold or kept in the family? Either way, a plan for maintaining the home and its eventual disposition can also be included in your last will.

How Can You Instruct the Guardian and the Trustee?

Your documents should address the unique circumstances of your children with the guidance and detail as deemed reasonable. In addition to a last will and trust, write a “letter of instruction” to the guardian to explain your minor children’s personalities, preferred foods, best friends, bedtime habits, etc. You can revise this letter from time to time, as appropriate.

Final Words

Most parents live long enough to see their children grow up and have children of their own. However, bad things do happen. Having an estate plan to prepare for the worst-case scenario does not make it more or less likely. However, it can help you protect everyone you love and everything you have.

Family (Estate) Feuds

March 15, 2022 No Comments

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Building wealth is only half the job. Protecting wealth for your loved ones and yourself is equally important. Through estate planning, business planning, and asset protection, our firm will help you save everything you love — family, friends, and favorite charities. For more information, be sure to visit our website, where you will have access to our blog, events schedule, and a complimentary newsletter subscription!

Family (Estate) Feuds

It is a sad truth: when a last surviving parent is sick in the hospital or nursing home, the children often fight over control and end-of-life.

Decisions. When that parent dies, fighting can continue over the distribution of the family estate. Will your estate plan keep your children from feuding with each other after you are gone? Forbes estimates that $30 trillion will pass through inheritance during the next three decades, which could leave many families ripped apart by feuds. The problem is that many adults do not save enough for their retirement and expect to fund their retirement with their anticipated inheritance.

A legal challenge to your estate plan can delay the distribution of assets to the beneficiaries. The litigation can also drain the estate through court costs, experts, and legal fees. The case can drag on for years, with the average costing $10,000 to $50,000, or even more.

Every family is different. Something that could trigger a knock-down-drag-out battle in one family will not cause a blip on the radar screen for another. Here are some of the reasons why families fight over the estate when the last parent dies:

Caretaker coercion. When one sibling takes care of an aging parent and then receives the house or a disproportionate share of the inheritance, the other siblings might cry foul and accuse the caretaker sibling of undue influence and coercion. While an adult who has the legal capacity to make a will or trust general has the right to dispose of her estate as she sees fit, this situation can lead to contests when the other children are not informed why the inheritance is not equal.
- Disinheritance. When a person disinherits a natural heir, that heir has nothing to lose by challenging the estate plan. Some people include language in their will or trust that penalizes would-be beneficiaries for contesting the will or trust.
- Sibling rivalry. Sometimes, siblings who never got along well try to settle old scores by squabbling over the deceased parent’s estate. The solution to this scenario will depend on the facts of the situation.
- Advancements or Gifts. If the parent helped a struggling adult child with student loans, a house down-payment, or other big-ticket items while the parent was alive, that child’s siblings might feel cheated. Make it clear in the estate plan whether this assistance was an “advancement” on the future inheritance or a gift. The former is “repaid” out of the inheritance, and the latter is not.
- Unequal financial status of heirs. Sometimes a parent leaves an asset, like a vacation home, to all the children equally. A wealthy beneficiary can afford to hold the investment until it is right to sell it. However, less affluent co-beneficiaries might want to sell the asset right away. The disparity in financial security can lead to disagreements among the siblings.
- Co-trustees or administrators. A parent might try to play fair among adult children by making them co-trustees of the trust or are co-administrators of the estate. Unfortunately, this strategy can backfire if the siblings do not work well together.
Last, do you tell the family of your plans, or not? They should know who is in charge of medical decisions. Some of our clients elect to have a family meeting and share their planning ahead of time. Whether to do so depends on your family dynamics. You do not need to provide detail and include dollar amounts, but a general idea of what assets are in the estate and who will get them can prevent unpleasant surprises.

Contrast the feuding family with the next story of great selflessness and sacrifice:

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Greatest Love Stories

February 14, 2022 No Comments

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Building wealth is only half the job. Protecting wealth for your loved ones and yourself is equally important. Through estate planning, business planning, and asset protection, our firm will help you save everything you love — family, friends, and favorite charities. For more information, be sure to visit our website, where you will have access to our blog, events schedule, and a complimentary newsletter subscription!

Greatest Love Stories

When a new employee comes to work at our office, I tell them that they need to pay careful attention: The greatest love stories in the world walk through our doors.

I ask new employees to read “The Notebook” by Nicholas Sparks. It is quite a tearjerker of a story. It also has a powerful message about the power of love and the wonder of commitment.

I will occasionally share some of these stories in our newsletters, as they deserve telling. I do so with permission from the clients involved. The stories are true, though we may change names at the client’s discretion.

We recently met with Cindy, a local businesswoman. She is a friend, a client, and a single mother to two children, one out of college and the other in her junior year. Cindy’s only sibling is her sister Katharine, who lives in Texas.

Cindy had solid and dependable support, encouragement, and love from her parents, Richard and Judith. They were always there for her, as solid footing to support her through her ups and downs.

Cindy was divorced in 2011 when her children were 17 and 10. During Cindy’s divorce, her parents provided her and her children with constant encouragement, support, and assistance.

Cindy’s parents created a Living Trust estate plan in 2017 to assist with their affairs at death or disability. They named Cindy as a current serving trustee.

Unfortunately, Mom and Dad have experienced ongoing memory problems in the intervening years, becoming more challenging.

Cindy was their primary support system. They wanted to remain in the home where they had lived for over 50 years. Cindy hired help during the day while she worked full-time and spent a few hours with them each day after work and on the weekends. Eventually, circumstances made it impossible for her father, and then almost a year later, her mother, to safely remain at home. Cindy worked diligently and located excellent placements for them in single-family group homes nearby. Unfortunately, after 60+ years of marriage, Richard and Judith were separated due to their different needs and capabilities.

Then COVID hit. Cindy then had to serve as the primary support for her Mom and Dad, whom she could not get in to see or help take care of other than provide phone support and occasional through-the-door visits. She did that faithfully for over a year and a half.

Her children are now mostly grown, although her youngest is still in college. Dad recently died, and she came in to review the trust and actions steps. She continues doing a fantastic, loving job looking after her Mom. She manages Mom’s affairs while juggling multiple other essential responsibilities.

Cindy deserves appreciation and recognition for the care and dedication she has given to her parents and continues to provide for her mother. Hers is a story of great love. She and her family certainly deserve that.

Fundamentals of Probate, Trusts and Estate Administration

January 14, 2022 No Comments

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Building wealth is only half the job. Protecting wealth for your loved ones and yourself is equally important. Through estate planning, business planning, and asset protection, our firm will help you save everything you love — family, friends, and favorite charities. For more information, be sure to visit our website, where you will have access to our blog, events schedule, and a complimentary newsletter subscription!

Fundamentals of Probate, Trusts and Estate Administration

The ultimate goal of estate planning is to preserve relationships among those you care about most by providing sound leadership about who will wind up your affairs and how the assets will be distributed. How much effort this takes depends upon many different factors: estate size, types of property owned, the state of residence, and the number of heirs, to name but a few. Also, keep in mind that These duties are usually carried out, even with the best of planning, by someone who is grieving and dealing with overwhelming emotions, both their own and often those of many other family members.

Probate and Non-Probate Assets

When the person uses a last will and testament, they plan on their estate to pass through probate, a court-supervised process. This process begins with the validation of the will by the court and the court’s approval of the executor nominated in the will. There are court fees, and court appearances are sometimes required.

The executor, or personal representative, is in charge of managing the estate. Some of the tasks include creating an inventory of assets and liabilities, filing the decedent’s last tax return, obtaining an EIN for the estate, filing the estate tax return, paying creditors, distributing assets, securing the home, and notifying heirs of the decedent’s death.

During probate, the will becomes part of the public record. Anyone, from disgruntled relatives to creditors and thieves, may view the will’s contents and inventory.

Probate is often confused with estate administration. Even if most or all assets have been taken out of the estate to avoid probate, there are still some administrative tasks, including filing the decedent’s last tax returns for state and federal taxes and, if necessary, filing an estate tax return.

Depending upon the jurisdiction and the complexity of the estate, probate may take a few months or several years.

What is Trust Administration?

Many people chose to place their assets in trusts to avoid having their estate pass through probate and exposure to the public record. Trust administration refers to the actions taken by the trustee: the person appointed in the trust to be in charge of managing assets. If the trust was created to distribute assets after death, the trustee follows instructions for property distribution to beneficiaries. Trust administration responsibilities vary greatly. One trust might instruct the trustee to make sure beneficiaries reach certain milestones before receiving all or part of their inheritance. Another trust may direct a percentage of the legacy to be released at certain ages. Still, other trusts continue to administer the estate for multiple generations.

Trusts are preferred by many because of privacy. Information about assets is solely between the trustee and the beneficiary. No information appears in the public record, and the court is not involved. The use of trusts may minimize the likelihood of lawsuits brought by heirs and creditors.

Trusts are also used to help if a person becomes disabled and can minimize elder financial abuse since the only person who can access the trust is the trustee.

Some Assets Pass Through Beneficiary Designations

Even without a trust, many assets do not pass through probate. Accounts with beneficiary designations, including pensions, retirement accounts, insurance policies, and financial accounts with TOD ownership, (Transfer on Death), joint bank accounts, and any account bearing a beneficiary designation are transferred directly to the beneficiary, after proof of death and identity has been accepted by the financial institution.

Whether passed through probate, trusts, or beneficiary designations, a well-organized estate plan and communications between the appropriate family members will make distributing assets post-mortem a more straightforward process.

Is this a Do It Yourself Project?

There are many alternatives to putting an estate plan in place. We are often needed to clean up situations where a well-meaning person has committed severe blunders in planning themselves. The best thing about doing it yourself is that you will never know if it worked or not. Unfortunately, guidance and experience are essential in the drafting and implementation of your plan.

Don’t let the lasting legacy of your life be tainted by being too penny-wise.

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